EghtesadOnline: Despite earlier reports that the government would make tweaks in procedures involved in divesting residue of its stake in state companies, a notice by the Iranian Privatization Organization says otherwise.

IPO, the body in charge of privatizing state-owned companies, has issued notice outlining the conditions of sale of government stakes in two major refineries, namely Shiraz Oil Refining Company and Lavan Oil Refining Company.

As per the notice, the shares will be offered in two monolithic blocks and prospective buyers are required to buy a whole block, a method tried and tested in the past that failed, according to Financial Tribune.

Each block includes 20% of the government shares. The SORC block comprises 878.55 million shares and is priced 11.8 trillion rials ($90 million).

LORC block is tagged at 11.04 trillion rials ($84 million) and contains 537.9 million shares. Interested buyers should pay half the amount in cash within 20 business days and the other half in installments over two years.

The base price for the shares was set based on prices shown on the IFB’s bulletin a day before the offer plus 20%.

Shares are to be offered on over-the-counter Iran Fara Bourse. The time of offer is not known yet and IFB is in charge of announcing the date.

Snags in divestiture procedures have rendered the IPO’s past efforts futile in selling the government stakes.

The government made concerted attempts to sell its shares in several companies, including six refineries, but could not find buyers who could afford the multi-million-dollar blocks.

In December, an ad hoc committee in charge of divesting government property said the government’s remaining stakes in six refineries would be offered via a major exchange-traded fund.

Small and Affordable

The new ETF was dubbed as “Iranian Refinery Industry Investment Fund” and was supposed to function as a tool through which government assets would be offered in smaller and more affordable blocks.

The government has reportedly considered discounts in the new scheme to attract buyers. Prices will be based on average final price of shares displayed on Tehran Stock Exchange and IFB bulletin boards during a calendar month to the day prior to the subscription date. Prices will be subject to up to 20% discount.

Offer notices on IPO website apparently indicate that the body still prefers to stick with past procedures and new approaches have been pushed aside, at least for now.

The government plans to divest its remaining shares in 18 companies, including 20% stake in oil refineries in Tehran, Tabriz, Bandar Abbas, Esfahan, 17% stake in Tejarat Bank and Bank Mellat each, 18.3% in Bank Saderat Iran and 11.44% in Amin Reinsurance Company.

Other companies whose shares will be offered include 18.96% in the Persian Gulf Petrochemical Industries Company, 12.05% in National Iranian Copper Industry Company, 17.2% in Mobarakeh Steel Company,14.04% in Iran Khodro (IKCO), 23% in SAIPA, 40% in Pars National Agro-Industry and Animal Husbandry Company, and 13.02% in the National Investment Company of Iran.